The Mid-Range: An Untapped Storage Market

Mid-size businesses need storage every bit as much as large enterprises, but the mid-range market presents a completely different set of challenges and opportunities for vendors. What can storage vendors do to successfully take advantage of this untapped market?

Mid-size businesses need storage every bit as much as their big brothers, but is storage really viewed as a priority by these businesses in the same way that it is by large enterprises? At the same time, vendors looking to take advantage of growing backup and recovery needs in the mid-range are finding themselves in a buyer’s market in terms of these businesses being able to benefit from comparative shopping for storage solutions.

In a sense, says Mike Heumann, director of HBA marketing at Applied Micro Circuits (AMCC) , this results from two factors — one the result of an economy still in recovery and the second a result of the wide variety of storage vendors honing in on mid-size businesses as an untapped growth market. Additionally, there are many potential technologies (NAS, iSCSI SANs, Fibre Channel SANs, etc.) that are available to these customers as a means to fulfill their storage needs.

“When this occurs in a market, it usually means that there will be increased competition (and price declines) to go after the customer’s money,” says Heumann. “At the same time, it is imperative that customers critically look at their short-term and long-term storage needs, the strategic role that storage plays for their business, and their ability to tolerate risks in choosing a storage technology.”

Heumann also points out that some of the potential advantages Fibre Channel can provide to mid-size businesses are technological maturity, a well-developed supply base, and performance that provides headroom for businesses to grow into. “Those Fibre Channel SAN companies that can deliver these advantages in low-cost, easy-to-use products that really amplify the strategic value of storage to the customer will be successful in capturing this market,” he concludes.

According to Jeff Silva, vice president of MaXXan, more and more storage vendors are offering modular products tailored for scalable growth that fit well into a mid-size business. He also says that mid-size companies seem more willing to try storage products and solutions from second-tier vendors (e.g., not IBM, EMC, or StorageTek) since they do not have as much ‘entrenched’ infrastructure to deal with.

According to Gartner, mid-size businesses are continuing to identify operational efficiency and are becoming the leading source of the pressure driving companies to optimize the value they get from their IT investments. And never before has there been so much viable competition in the mid-market among storage vendors.

Silva says a lot of mid-size companies have the benefits of seeing how larger companies have developed their IT infrastructures and being able to determine what works and what doesn’t. “They also are very cost conscious and look to purchase products that don’t lock them into a particular vendor, but rather allow them to build more heterogeneous environments — taking advantage of best of breed solutions from a wider variety of suppliers,” he continues.

To Heumann this means that for SMBs (small and mid-sized businesses) to make changes to their storage infrastructure, new storage approaches and products must provide clear ROI advantages when compared to their existing choices. “Additionally,” he continues, “it means that these new storage approaches must compliment and interoperate with the initiatives that SMBs are undertaking to optimize the value that they get from their IT investments.”

And, according to Heumann, the storage industry must finally and completely address the interoperability issues between storage products so that they function together seamlessly, as LAN products do today.

Vendors Can Help Customers Meet Their Challenges

One of the challenges that many mid-size businesses face is that their staff and budgets cannot keep pace with the demands of an ever-growing storage infrastructure. So, what can storage vendors do to help customers with this challenge? Silva says the solution is simple: standards, standards, and more standards, because common ways of managing disparate storage resources would benefit everyone — including storage vendors.

However, Heumann says that the real challenge the mid-size business market raises for SAN vendors is how to provide the same capabilities without the complexity. This, according to Heumann, includes well-thought out bundled solutions that meet the needs of mid-size businesses without significant management demands.

“It also means adding in product features such as no-reboot SAN reconfigurability and simple, intuitive configuration utilities with a Windows or Linux look and feel that minimize the management challenges of networked storage.” Finally, he continues, “we need to work with local VARs and integrators to provide effective support solutions for our customers.”

Some industry experts are saying that never before has there been so much viable competition in the mid-market amongst storage vendors. And some storage vendors believe that this statement, in a sense, is true. “There are certainly a number of companies and technologies that wish to service this market as it moves away from direct-attached storage (DAS) to fabric-attached storage (FAS),” says Heumann.

“However, viability is a function of how well the technologies and products fit the needs of the customer,” he continues. Heumann illustrates this point with the example of how software-only iSCSI drivers would generally be ill-suited to high-performance database applications due to their inability to sustain high storage transaction rates or bandwidth.

Viability also means that products are easily integrated into a company’s existing IT practices. “If vendors simply sell low-cost variants of their enterprise storage products into this market, they will not meet the needs of these customers,” says Heumann. Rather, the products must be tailored to fit the way that medium-sized businesses use and manage storage now.

Heumann also says that these products must be offered as part of turnkey solutions that are fully integrated and tested to minimize the learning curve and risks to SMBs utilizing them for their storage needs.

Silva agrees and notes there are a lot more companies servicing the mid-tier market than ever before. “The larger storage vendors are moving their products "downstream" to service this market. There are a lot of smaller vendors with excellent solutions that already support the mid-market,” he says.

This is Part I of a two-part series. The next installment will answer the following questions:

Is there a trend on the part of mid-size businesses to typically buy storage equipment from the same vendor that sold them their services? And, if so, is this helping storage vendors or hindering them?

Are mid-size businesses going with vendors that have the “lion’s share of the sever market” simply because they have the “lion’s share” or because this is where they get the most bang for their buck?

Do storage vendors need to understand storage architecture and preferred buying behaviors of mid-size businesses before developing their “go to market” strategies?"

In mid-size businesses, does service and customer support rate highly in storage product selection? And how does reliability of the storage vendor and ease of doing business with that vendor rate in product selection?

Cost savings is one of the many drivers for increased storage requirements in mid-size businesses; what are a few of the others?

Gartner reported that in mid-size businesses, less than 10 percent of a company's IT staff typically have storage responsibilities. Are storage services a natural fit for these companies?

In the case with other managed services, will mid-size businesses balk at the suggestion of third parties managing part of their infrastructure?

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